[GRAPHIC OMITTED] Russell-Stanley Russell-Stanley Holdings, Inc.
685 Route 202/206
Bridgewater, NJ 08807-1762
Contact: Ron Litchkowski
(908) 203-9500
Press Release
Russell-Stanley Announces Third Quarter and Year to Date Results
Bridgewater, New Jersey, October 17, 2001 - Russell-Stanley Holdings, Inc.
today announced results for the third quarter and nine-month periods ended
September 30, 2001.
"The continuing sluggish North American economy and the tragic events of
September 11 have resulted in lower demand for industrial container products,
which impacted our results during the third quarter, " said Dan Miller,
President & CEO of Russell-Stanley. He further added, "While our performance
comparisons trail last year, we remain sharply focused on cost reductions and
efficiency gains. Combined with our continued emphasis on excellent customer
service and enhanced quality, we have been able to partially temper the
economic factors impacting our business."
Consolidated sales for the third quarter were $60.4 million, a 12% decline
versus the third quarter of 2000. This decrease was due primarily to a planned
account rationalization in the plastic services business as we transitioned
this business from a drum leasing to a reconditioning business model to
improve Adjusted EBITDA. In addition, we experienced unit volume softness in
the containers segment, due principally to the economic effects impacting our
market. Consolidated Adjusted EBITDA of $3.9 million was down $2.1 million
versus last year's third quarter due primarily to the unit volume softness in
the containers segment, partially offset by improved toll.
Consolidated year to date sales of $190.0 million compared to $211.1 million
for the first nine months of last year. The decline was due principally to the
current economic slowdown, impacting all sectors of the market, which
adversely effected container unit volumes; coupled with the planned
rationalization in plastic services. Year to date consolidated Adjusted EBITDA
of $14.4 million (7.6% of revenues) compares to last year's $17.2 million
(8.2% of revenues). The decrease is due primarily to across the board unit
volume softness, which was partially offset by lower steel costs and a
company-wide reduction in delivery, selling, and general & administrative
expenses (D,S,G&A). The current year to date D,S,G&A reduction of $.9 million
versus 2000 is a continuation of cost reduction initiatives begun in 1999.
These activities have contributed savings in excess of $3.0 million annually.
Mr. Miller noted, "We recently announced our participation in the Containers
America, LLC steel drum consortium. Our participation along with the five
original steel drum manufacturers permits the consortium to provide
exceptional customer service and the highest quality products through an
expanded geographic presence. In addition we can leverage our steel business
through group purchasing, improved logistics and enhanced product development.
We also announced the decision to close our Allentown facility by year-end and
re-deploy machine capacity in South Brunswick, NJ and the Midwest. Savings
from the Allentown shutdown should approximate $1.5 to $2.0 million annually."
Mr. Miller concluded, "These initiatives along with the daily execution of our
strategic plan have us well positioned to take advantage of an upturn in the
economy and its impact upon the industrial container market."
* * * * * *
The Company has filed periodic and current reports with the Securities and
Exchange Commission. For additional information regarding the Company's
financial restructuring, reference should be made to Annual Report on Form
10-K for the year ended December 31, 2000; Quarterly Reports on Form 10-Q for
the quarters ended March 31, 2001 and June 30, 2001; Current Reports on Form
8-K filed on January 26, 2001, January 29, 2001, February 12, 2001, February
23, 2001, April 25, 2001, July 2, 2001, and July 18, 2001.
Russell-Stanley Holdings, Inc. is a leading manufacturer and marketer of
plastic and steel containers and a leading provider of related container
services in the United States and Canada.
This press release includes forward-looking statements for the purposes of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. We have based these forward-looking statements on our
current expectations and assumptions about future events. Although we believe
our expectations and assumptions are reasonable, we cannot assure you that our
expectations and assumptions will prove to have been correct. We do not intend
to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
RUSSELL-STANLEY HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2001 AND 2000
(In Thousands) (Unaudited)
--------------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- ---------------------------
2001 2000 2001 2000
--------- ----------- ---------- ----------
(Unaudited) (Unaudited)
NET SALES
Containers $ 50,937 $ 54,783 $ 156,284 $ 166,966
Services 9,471 13,670 33,725 44,120
----------- ----------- ----------- -----------
Total 60,408 68,453 190,009 211,086
COST OF SALES 50,701 56,510 157,584 172,763
----------- ----------- ----------- -----------
GROSS PROFIT 9,707 11,943 32,425 38,323
OPERATING EXPENSES:
Delivery, selling, general & administrative 10,936 11,063 35,267 36,124
Financial restructuring 1,505 - 4,384 -
Restructured operations - - 13,272 -
----------- ----------- ----------- -----------
Total expenses 12,441 11,063 52,923 36,124
----------- ----------- ----------- -----------
(LOSS) INCOME FROM OPERATIONS (2,734) 880 (20,498) 2,199
INTEREST EXPENSE 6,221 5,908 18,370 17,188
OTHER (INCOME) EXPENSE - NET (2) 73 (970) 196
------------ ----------- ------------ -----------
LOSS BEFORE INCOME TAXES (8,953) (5,101) (37,898) (15,185)
INCOME TAX PROVISION (BENEFIT) 2,320 (1,532) 22,487 (4,557)
----------- ------------ ----------- ------------
NET LOSS $ (11,273) $ (3,569) $ (60,385) $ (10,628)
============ =========== =========== ===========
EBITDA* $ 3,036 $ 8,332 $ (663) $ 25,187
Adjusted EBITDA** $ 3,917 $ 6,011 $ 14,382 $ 17,207
* "EBITDA" is defined as net income (loss), plus interest expense, income
tax expense (benefit) and depreciation and amortization.
** "Adjusted EBITDA" is defined as EBITDA less Container Purchases, plus
the add-back of non-recurring charges.